Company hires and sector developments in structured finance

Accrual clause nixed

The New York State Court of Appeals last week held that contractual attempts to extend the statute of limitations for causes of action involving breaches of contract are unenforceable because they violate New York law and public policy. In the case at issue, the plaintiff (Deutsche Bank National Trust Company) argued that the accrual clause in Harborview Mortgage Loan Trust 2007-7 created a substantive condition precedent and that the accrual clause expressed the parties’ clear intent to delay accrual of a breach of contract cause of action until the specified events had occurred. As trustee of the RMBS, it brought suit to enforce representations and warranties that were made by the defendant (Quicken Loans). A recent Cadwalader memo suggests that the fact that the Appeals Court disagreed with both arguments means that existing contracts that provide that cure or repurchase are the sole remedies for a breach of reps and warranties are unlikely to support an argument that a cause of action for breach accrued at any time after the making of the related contract. Additionally, accrual clauses, as currently drafted in typical agreements, that purport to delay the accrual of causes of action need to be carefully evaluated in future transactions and redrafted to address the shortcomings identified by the court.

FinHub launched

The US SEC has launched a Strategic Hub for Innovation and Financial Technology (FinHub), which will serve as a resource for public engagement on its fintech-related initiatives, such as distributed ledger technology, digital marketplace financing and artificial intelligence/machine learning. The FinHub replaces and builds on the work of several internal working groups at the SEC that have focused on similar issues. The portal will be led by Valerie Szczepanik, senior advisor for digital assets and innovation and associate director in the SEC's Division of Corporation Finance, and staffed by representatives from the Commission's divisions and offices who have expertise and involvement in fintech-related issues. 

UK

Tunstall Real Estate Asset Management has hired David White as head of debt strategies, tasked with developing the Tunstall business and increasing the loan book by £150m. White joins from CR Management where he was md, responsible for UK debt business.